Fontenot's Rice Drier, Inc. v. Farmers Rice Milling Co., Inc.

329 So. 2d 494
CourtLouisiana Court of Appeal
DecidedJune 2, 1976
Docket5367
StatusPublished
Cited by9 cases

This text of 329 So. 2d 494 (Fontenot's Rice Drier, Inc. v. Farmers Rice Milling Co., Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fontenot's Rice Drier, Inc. v. Farmers Rice Milling Co., Inc., 329 So. 2d 494 (La. Ct. App. 1976).

Opinion

329 So.2d 494 (1976)

FONTENOT'S RICE DRIER, INC., Plaintiff and Appellant,
v.
FARMERS RICE MILLING COMPANY, INC., Defendant and Appellee.

No. 5367.

Court of Appeal of Louisiana, Third Circuit.

March 10, 1976.
Rehearing Denied April 7, 1976.
Writ Refused June 2, 1976.

*495 Guillory, McGee & Mayeux, by Robert K. Guillory, Eunice, for plaintiff-appellant.

King & Ricketts, by Randall E. Ricketts, Lake Charles, for defendant-appellee.

Before CULPEPPER, DOMENGEAUX, and PAVY, JJ.

DOMENGEAUX, Judge.

Plaintiff-appellant, Fontenot's Rice Drier, Inc., instituted this action to recover a portion of the price due for the sale of a shipment of rice to the defendant-appellee, Farmers Rice Milling Company, Inc. Defendant raised the defense of compensation and filed a reconventional demand for damages resulting from a prior shipment of plaintiff's rice which was allegedly inferior. The trial judge found that defendant's plea of compensation was justified, and dismissed plaintiff's suit at his costs. From this judgment plaintiff has appealed.

On October 10, 1973, plaintiff entered into a contract with one Don Harrington, an agent of the defendant, whereby he sold a quantity of rice (6,500 barrels) to the *496 latter for the sum of $131,000.00. The written contract executed by the parties is reproduced as follows:

This document reveals that the parties agreed to the amount of 6,500 barrels with an estimated milling yield of "92-112", for a price of $20.20 per barrel. Furthermore the rice was to be stored free by the plaintiff and transported by the defendant no later than December 31, 1973. The rice was paid for on October 10, 1973, although defendant had not yet taken possession of the shipment and transported it to its mill.

The defendant mill began loading and shipping the rice on December 21, 1973, and completed this task on January 4, 1974. However, plaintiff did not object to this delay in removing the rice from his premises.

After the last of the rice involved in this sale was removed by the defendant, plaintiff contacted Harrington and informed him that he had a remaining quantity of 615.91 barrels at an estimated milling yield of 92-112 which he was willing to sell for the currently prevailing price of $24.40 per barrel. Harrington communicated this offer to the defendant who accepted and transported the rice to its milling facility. The record does not reveal the exact day on which the parties agreed upon the second sale, but the weight sheet attached to plaintiff's petition indicates a date of January 3, 1974.

After the passage of several days plaintiff contacted Harrington with an inquiry as to why he had not received payment for the second shipment of rice. Harrington told plaintiff that he would investigate the matter and that payment should be made within three or four days. Plaintiff waited several more days, did not receive payment, and contacted Harrington again. On this occasion Harrington informed the plaintiff that his payment would have to be decreased somewhat because the rice was of an inferior quality, however he failed to indicate the extent of the proposed reduction. The record indicates that, at this time, plaintiff was under the impression that this reference was to the second shipment of rice. After several days and no receipt of payment, plaintiff again called Harrington and this time spoke with his associate, a Mr. Guidry, who informed plaintiff that the mill was dissatisfied with the quality of the first shipment of rice and was therefore deducting an amount to compensate for its inferior quality from the payment for the second shipment of rice. This first notice to plaintiff concerning a complaint about the quality of *497 his rice (first shipment) was made approximately three to four weeks after the shipment was completed. Thereafter the "reduced" payment for the second shipment was not forthcoming, and plaintiff consulted his attorney who contacted the defendant concerning the transaction. On February 4, 1974, plaintiff received a check for $3,629.34 with a notation at the bottom of the check "In full payment of all amount due". The check was signed by Harrington.

Since plaintiff's bill for the second shipment of rice was in the amount of $15,459.34, he refused to accept this check with the above described notation and tendered it back to defendant who issued a second check for the same amount, but without the notation relative to accord and satisfaction.

Much evidence was adduced concerning the customary manner in which rice sales are transacted in this portion of south Louisiana. The testimony established the procedure to be as follows:

The sale of rice between a farmer (drier) and a mill is negotiated between a broker or intermediary, who usually acts as an agent of the buyer (mill). The parties agree upon a price based upon quantity and quality (estimated milling yield). Once the agreement is made the rice is transported by the mill within ten to fourteen days. Before each truckload of rice is unloaded, a sample is taken at the mill which is compared to an original sample which determined the sale quality. If the quality of the shipment is substantially equivalent to that of the agreed milling yield, the truck is unloaded, and the grain is milled. However, if the sample reveals a milling yield below that contemplated by the agreement, the mill contacts the seller who may then have his own sample made. If the parties agree that the shipment is yielding rice of a lower grade than that of the original sample and agreement, they attempt to renegotiate the price. If an impasse is reached either party then has the option to withdraw from the sale. However, if a new price can be agreed upon the remainder of the rice is unloaded, and the seller is paid. Customarily, the buyer does not receive payment until after the rice has been sampled and the estimated milling yield verified.

The trial judge found that the contract of sale between the parties to this litigation was unaffected by the prevailing custom in the area and industry for two reasons:

First, the price was paid before the buyer took actual delivery of the rice; and second, delivery was not taken for a period of approximately two and one-half months.

The applicable provisions of the Civil Code pertaining to custom and usage are as follows:

"Art. 1903. Extent of implied incidental obligations
The obligation of contracts extends not only to what is expressly stipulated, but also to everything that, by law, equity or custom, is considered as incidental to the particular contract, or necessary to carry it into effect."
"Art. 1953. Usage controlling in case of ambiguity
Whatever is ambiguous is determined according to the usage of the country where the contract is made."
"Art. 1964. Incidents supplied by law, equity or usage
Equity, usage and law supply such incidents only as the parties may reasonably be supposed to have been silent upon from a knowledge that they would be supplied from one of these sources."
"Art. 1966. Usage as part of contract
By the word Usage mentioned in the preceding articles, is meant that which is generally practiced in affairs of the same nature with that which forms the subject of the contract.. . . ."

*498

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329 So. 2d 494, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fontenots-rice-drier-inc-v-farmers-rice-milling-co-inc-lactapp-1976.